How does better operational forecasting impact market capitalization? The answer may surprise you

Transcript

Abstract

A financial forecast is very different than a supply chain forecast, and many are confused by the market hype on one-number forecasting. An effective supply chain strategy requires careful definition with the finance team. However, it is worth it. Inventory turns correlate to market capitalization, and who can argue with improving market capitalization? Research suggests that the impact of a better forecast today is marginal.

What is more important is the design of inventory strategies in the supply chain and the management of form and function of inventory. This is one way CFOs can drive tangible market capitalization improvement from their operations.